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Gold Bugs? Seres Files For First IPO of Human Microbiome Era

What was it Sigmund Freud said? In dreams, feces is actually a symbol of money. Seres Therapeutics of Cambridge, MA, is about to put that notion to the test.

The biotech has filed to go public, looking to tap the public markets on the momentum of its first product, a mixture of bacterial spores derived from healthy human poop. The experimental treatment, SER-109, is aimed at stopping Clostridium difficile infection, which was implicated in the deaths of 29,000 Americans in 2011, according to this study.

Until recently known as Seres Health, the company would be the first to go public based on the recent explosion of microbiome research. When ingested, the spores of SER-109 bloom into good bacteria and re-calibrate the patient’s complex microbial environment, which leaves no room for C. difficile.

SER-109 is for infections that aren’t responding to conventional antibiotics. It should yield Phase 2 results in mid-2016. If all goes well, Seres will begin a Phase 3 trial soon after that, according to the company’s prospectus.

CEO Roger Pomerantz, an infectious disease specialist and former top dealmaker at Merck & Co. (NYSE: MRK), told Xconomy last summer that an IPO was on the agenda. Since then, the company’s intentions became even clearer with a $48 million Series C round that included the kind of investors that often want to see an IPO in the near future. Seres has raised $137 million in equity and debt since its inception in October 2010. It has spent $36 million.

During the two-year biotech bull run, public investors have embraced some cutting-edge medical advances, such as gene therapy and T cell-based cancer treatments. Seres’s IPO try will be an interesting gut check of that enthusiasm, for a few reasons.

Research into the human microbiome—the trillions of bacteria and other microbes in and on our bodies that profoundly influence our health—has yielded fascinating insights and even a few clinical therapeutic programs. (SER-109 is the most advanced.) But it’s still new. Even if it works as well as clinical trials seem to indicate—it wiped out the infection in 29 of 30 patients in a Phase 1/2b trial—there’s no telling what advances in coming months or years could render it irrelevant.

For example, the nonprofit stool bank OpenBiome is providing a service called fecal transplantation at practically no cost that, to date, has also shown exceptional results for C. difficile infection.

In an explanation of fecal transplantation in its prospectus, Seres downplays its competitive threat. Seres warns that the procedure could transmit pathogens from donor to recipient, would be hard to industrialize, and isn’t approved by the FDA. What Seres doesn’t mention, however, is that after public pressure, the FDA decided in 2013 to give fecal transplantation a pass. It’s not approved for C. difficile treatment but for now the FDA isn’t stopping its practice, either.

That said, Seres is also developing a pipeline of other products, including a second treatment for C. difficile that’s meant to be combined with antibiotics to stave off a recurrence. It would also like to start a human trial this year with a treatment for ulcerative colitis, according to its prospectus, and it has research programs in metabolic conditions (such as early-stage diabetes), cancer chemotherapy, and immune suppression. That broad remit is a testament to the wide-ranging theories about the microbiome’s effect on health being tested right now in academic and industry labs around the world.

Seres aims to trade on the Nasdaq under the ticker symbol “MCRB.”

Flagship founded the company and remains its largest stockholder, with a 54.7 percent stake. Others include Nestle Health Science U.S. Holdings (18.3 percent), Fidelity Management & Research (8.1 percent), and Enso Ventures 2 Ltd. (5.9 percent).